Ethereum Activates London Upgrade and Starts Burning Base Fees

Ethereum activated its London network upgrade at block 12,965,000 on August 5, 2021, placing the protocol’s long-debated EIP-1559 fee mechanism into production. The block was recorded at 12:33:42 UTC, matching the activation height announced by the Ethereum Foundation in July.

London mattered because it changed both the experience of paying for Ethereum transactions and the economic path of part of every transaction fee. Under EIP-1559, each block carries a protocol-calculated base fee. That base fee is destroyed rather than paid to the miner, while users can add a priority fee to encourage faster inclusion.

The change did not make Ethereum transactions free or guarantee consistently low fees. It instead attempted to make the price required for inclusion more predictable while allowing block capacity to expand temporarily during bursts of demand.

A new fee market

Before London, Ethereum principally used a first-price auction: users selected a gas price, and miners generally favored the highest bids. The EIP-1559 specification identified volatile bids, delays and frequent overpayment as weaknesses in that arrangement.

The new mechanism adjusts the base fee from one block to the next according to how much gas the preceding block used relative to a target. When usage exceeds the target, the base fee rises; when usage falls below it, the fee declines. Transactions can specify both a maximum total fee and a maximum priority fee.

London also introduced elastic block capacity. Blocks could grow to as much as twice the target size to absorb a short-lived surge, although the adjustment formula was designed to pull average usage back toward the target. This was a congestion-management mechanism, not a permanent doubling of Ethereum’s intended throughput.

Legacy-format transactions remained valid, but their gas price would be divided between the mandatory base fee and any amount available as a miner priority payment. Wallets and infrastructure providers therefore needed to understand the new fee fields even though older transactions were not immediately rejected.

The first block-level evidence

Etherscan’s record for activation block 12,965,000 shows a base fee of 1 gwei and 30,025,257 gas used. Multiplying those two recorded values produces 0.030025257 ETH, the amount the explorer identifies as burned in that block.

That figure is a single-block observation, not a daily burn total or a forecast of Ethereum’s supply. It nevertheless verifies that fee destruction began with the activation block rather than remaining only a proposal.

The burn altered the distribution of transaction revenue because miners no longer received the base-fee component. They continued to receive the proof-of-work block subsidy and eligible priority fees. For ether holders, the significance was that network use now removed some ETH from circulation, counterbalancing issuance to a degree determined by demand for block space.

What remained uncertain on August 5

EIP-1559 did not establish that ether had become a deflationary asset. The specification expressly noted that supply would contract only when fee burning exceeded new issuance; demand could not be known in advance. Claims of guaranteed deflation therefore went beyond what the protocol change established on August 5, 2021.

London contained four other proposals alongside EIP-1559. They exposed the base fee to smart contracts, reduced certain gas refunds, reserved a contract-code prefix for a future format and postponed Ethereum’s proof-of-work difficulty bomb until December 2021. Together, those changes made London a broader operational upgrade, but the live fee market and burn mechanism supplied its immediate economic importance.